How The Strikes Could Affect The Pay Of A Wealthy Hollywood CEO:
Most entertainment giants won’t have to face a shareholder vote upon pay till early next year, yet the Writers Guild as well as SAG-AFTRA have pointed to the huge salaries of top leaders as a sign that the companies are able to reach a deal.
For the first occasion in more than 50 years, Hollywood actors as well as writers are on strike together. This has put the pay of executives in the spotlight.
Talent is posting leftover checks that aren’t even worth the postage it took to send them, along with notes that criticize the eight-figure salaries of Hollywood leaders.
Of course, SAG-AFTRA as well as the Writers Guild of America didn’t strike over CEO pay, but the way it looks is adding fuel to the fire.
Robert Reich, a former U.S. Secretary of Labor as well as co-founder of the Economic Policy Institute, says that what is going on in Hollywood right now is a microcosm of what is going on in the rest of the country.
Robert Reich Stated That CEOs Of Big Companies Make Hundreds Of Time As Much As The Average Worker:
He says that CEOs of big companies often make hundreds of times as much as the average worker, and in some entertainment companies, the difference is even more shocking.
“Is that right? Fairness depends on the eye of the viewer, of course, but it doesn’t feel fair, and a lot of people don’t like it,” Reich says.
“It looks like the game will go up against regular workers as well as in favor of those at the top. You have a lot of frustration and rage, which leads to work stoppages as well as strikes in the end.”
Now It’s 92 Days But The Strike Is Still Going On:
The Writers Guild of America as well as the biggest companies and streaming services in Hollywood have ended their 92-day standoff.
President of the Alliance of Motion Picture as well as Television Producers Carol Lombardini called WGA leaders on Tuesday to ask for a meeting to talk about restarting contract talks, which have been on hold since May 1 when writers went on strike.
Almost 11,500 Members Send A Email On Tuesday Night That They Are Going On Strike:
The WGA told its 11,500 members on Tuesday night through an email that they will meet on Friday. When the writers as well as players went on strike in 1960, the top leaders only made about 20 times as much as the average worker.
From 1978 to 2021, CEO pay went up 1,460 percent, according to a study from EPI in 2022. Reich says that during those years, executives’ pay went up because they were given more stocks as well as stock options.
According To Study CEO Pay Increased By 1460% From 1978 To 2021:
This gave CEOs a reason to raise the price of shares by doing things like buying back shares. This make the executives money and made them seem more important to the business.
Reich says, “If they have a track record of raising stock prices, that makes them someone whose directors would like to make payments more.”
“No board of directors within any company is going to tell stockholders that they didn’t try hard enough to hire the most qualified top executive they was able to.”
Steven Kaplan Stated That Pay For CEO Of S&P Companies Was Now Approximately $15 Million:
Steven Kaplan, a professor at the University of Chicago Booth School of Business, says that the typical pay for CEOs of S&P 500 companies is now about $15 million.
People have been complaining regarding it for decades, but nothing has changed because Kaplan says so. They are very rare, and they receive compensation for doing a very hard job. Most CEOs in the entertainment business make a lot beyond that.
Both Group Did Not Came To A Fair Deal After 3 Months Of Strike:
A meeting between the two groups that are at odds doesn’t mean that talks will start up again right away, but it does show that the ice has melted after a three-month work stoppage.
The WGA said it would keep its members informed after the meeting, but warned them not to believe rumors: “Whenever there has significance news to share, you are going to hear it directly from us.”
Highest Paid Leader Got More Than $240 Million Within Pay:
In 2022, the highest-paid Hollywood leaders got more than $240 million in pay, and if you count Comcast, which owns NBCUniversal, they got almost $314 million.
In June, THR’s CEO report showed that the average pay for those on the list was $32 million. “Let’s say you pay someone $20 million, which isn’t unheard of,” says Kaplan.
Here Is The Example For You To Understand Better:
“Let’s say a company was worth $100 billion, as well as a good CEO will make it worth 10 to 20% more. If the person intends to make your company worth $20 billion more, it’s a good deal to give them $20 million.
Even though the streamer’s pay group had changed the deals to give more stock options as well as lower the yearly salary, this still happened.
For 2023, executive chairman Reed Hastings, co-CEO Ted Sarandos, as well as co-CEO Greg Peters must each take at least half of their pay within the form of stock, and the co-CEOs’ salary is set at $3 million, with the rest coming from goal bonuses.
Under the suggested deals, these three people, plus CFO Spencer Neumann, Chief Legal Officer David Hyman, as well as Chief Communications Officer Rachel Whetstone, would get a total of $109 million in pay, including $23.2 million in salary and $54.6 million in stock options.
Hollywood can’t get back to work until both strikes are over, but it could be easier for the AMPTP and the WGA to come to a deal right now.
Fran Drescher Stated That The Group If Prepared Financially For The Next 6 Months:
While the fight between the stars is still fresh During an interview on the Today show on Tuesday morning, SAG-AFTRA head Fran Drescher said that the group has “prepared financially for the next six months” and that the fight with the writers is getting closer to the 100-day mark, which is when the 2007 strike was about to end.
Kaplan says, “That’s how the shareholders tell the board, ‘We think you’re paying these people too much.'” “Most of the time, when shareholders decide against something like that, the board does something the following year. Sometimes, they don’t care. The risk is, of course, that someone will start a proxy fight.”
According To Dodd-Frank Act Shareholders Can Vote On The Salary Levels Of The CEO And CFO:
The SEC set up these Say upon Pay votes in 2011 after the Dodd-Frank Act was passed. Most public companies are required to let shareholders vote on the salary levels of the CEO, CFO, as well as at least three additional highly paid leaders on a regular basis.
Companies have votes at different times, but at least once every three years. They’re only suggestions, so if owners vote against them, the company doesn’t have to change how it pays its workers. However, a no vote will usually cause the company to do something.
“The real test is whether or not the shareholders agree with it,” says Kaplan. “The owners are saying, ‘We’re getting our money’s worth.’ If the owners decide against it, you’re left to think about whether or not you should change it.
Within June Comcast Voted Giving Support To Companies Top Pay Deals:
In June, owners of Comcast voted strongly in favor of the company’s top pay deals, but Warner Bros. Discovery’s Say on Pay vote only got a 50.8% yes vote this spring.
In addition to putting executive pay under the microscope, the strikes also serve to put to rest some false ideas about what life looks like for the majority of individuals in Hollywood.
Reich says, “Most people in America think that all writers as well as stars within Hollywood are famous and rich.”
“But the average writer is just one of many people who want to make a living as a writer, so he or she has to compete hard with other writers as well as will soon have to compete with computers, which is lowering their pay.
Within Study From July 18 Typical US Worker Make $1,100 Per Week:
In fact, there has been about a 23% drop over the past ten years. Most artists, though, are not stars.” In a study from July 18, the U.S. Bureau of Labor Statistics said that the typical U.S. worker makes $1,100 per week, which is the same as $57,200 per year as well as $31.43 per hour.
Reich says, “A lot of people can’t survive without money coming in.” “Most people forget that workers have a hard time during strikes.
Reich Says If You Make Only $26,000 A Year And Went To Strike How Will You Be Able To Living?
If you only make $26,000 a year as well as proceed on strike, how will you be able to keep living? Workers within Los Angeles are even more likely to live from paycheck to paycheck than workers in the rest of the country.
Every year, companies have to tell the FTC how much the CEO makes compared to the average employee. Andy Jassy of Amazon had the lowest ratio in 2022.
In 2021, he had the highest ratio within the S&P 500, with a one-time stock award worth regarding $212 million giving him a ratio of 6,474:1. Tim Cook of Apple had a nearly nine-figure pay deal and a ratio that was more than double that of former Disney CEO Bob Chapek.
When We Split Between The Two Co-CEOs, Netflix’s Ratio Was Below Average:
When split between the two co-CEOs, Netflix’s ratio is below average. However, when the overall CEO pay packages for 2022 were regarding $101.4 million, Netflix’s ratio is 464:10, which is just behind to Apple.
Last Friday, people from the companies got together to talk about how to get back to negotiating. But as late as Tuesday morning, David Goodman, the other co-chair of the WGA’s bargaining group, told Vanity Fair that the AMPTP had not yet called the guild.
He said, “We’re ready to go return to the table and end this, but we’ll fight as long as we’re able to.” “We haven’t reached out officially yet, but we’re ready whenever they are.”
Most Hollywood companies won’t have to deal with a Say on Pay vote till early next year. It’s still unclear how much the strikes and criticism of salaries will affect owners or how much it will mean in the end.
“Most owners really don’t have a lot of power. What can the average investor do? Reich says, “At most, just sell the share.” “The real power lies with the institutional shareholders, like the big pension funds that run Wall Street.”
So far, the labor protests haven’t scared Wall Street too much. Most media and entertainment stocks have stayed the same or dropped by a few percentage points, but Kaplan says they will have an effect in the long run.
Reich Says, “Economics was not just about supply and demand. All of this is about power.”:
Reich says, “Economics was not just about supply and demand. All of this is about power. Because they are so big, these companies have a lot of power. On the opposite hand, workers, artists, and writers who work alone don’t have nearly as much power.
If they join their respective unions, and if the unions join together, as the artists and writers have done on their own since the 1960s, that could give them a lot of power and change the rules of the game.